"The study, highlighted by the Denver Business Journal, tracked a range of operating expenses, including labor and food costs, and found Denver's overall per-unit burden has now edged past New York's. The Feb. 27 piece points to menu price inflation and wage-driven cost spikes as the main forces behind the crossover."
"A Colorado Restaurant Association survey cited by Axios Denver found that recent wage hikes tacked on roughly $82,000 a year in costs per restaurant on average, a crushing hit in a business where profit margins often hover in the low single digits."
"The James Beard Foundation's annual industry report, reported exclusively by Axios, found that operators who raised menu prices more than about 10% were actually more likely to see profits fall. That limited ability to pass higher costs to customers helps explain why rising local wages are showing up as staff cuts and closures instead of just bigger checks."
Denver restaurants face unprecedented operating costs that have surpassed New York City levels, marking a significant shift for a city marketed as affordable. Wage increases averaging $82,000 annually per restaurant, combined with higher ingredient costs and declining downtown foot traffic, drive this crisis. A 24% drop in retail food licenses from mid-2023 to early 2025 reflects the severity. Restaurant owners report cutting staff, reducing hours, and closing locations entirely. Nationally, independent restaurants have hit a pricing ceiling, with operators raising menu prices beyond 10% experiencing profit declines rather than gains, preventing cost recovery through customer charges.
#restaurant-economics #denver-cost-of-operations #wage-inflation #small-business-closures #food-service-industry
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